ISBP revision – Draft 1 recommendations

Ref PRELIMINARY CHANGE RATIONALE

CONSIDERATIONS
1 Sanctions - new New Preliminary Consideration: Whilst not directly pertinent to document
Preliminary Consideration ICC discourages the use of a sanction clause in a credit. examination, sanctions clauses may have a
(pending Legal Committee Any further wording (or even incorporation) will depend on the content of the Legal Committee tangential impact on the examination process.
review on “non- review.
documentary conditions”) Nevertheless, a final decision will be made upon
release of the Legal Committee review.
2 Excessive detail - new New preliminary consideration: Ensures alignment with the “Guidance Notes for
Preliminary Consideration Credits which contain excessive details such as lengthy elements in the description of goods Documentary Credit Formats”.
and/or have included terms which only belong in the sale or other contract, should be avoided
as these often cause unintended consequences and payment delays. Only documents that are The phrase “have included terms which only
necessary (e.g. for customs clearance purposes) should be stipulated in a credit. belong in the sale or other contract” reflects the
Guidance Notes and is transparent in intent, i.e.,
terms relating specifically to the commercial
agreement between the buyer and seller and
governing the execution of the sale itself.
3 Previously accepted New Preliminary Consideration: Alignment with ICC Opinions R332 (TA212), R556
discrepancies – new The fact that a bank may have previously accepted discrepant documents, with or without an (TA525), and TA936rev.
Preliminary Consideration applicant waiver, does not bind that bank to accepting a similar discrepancy on any future
drawing unless the law of the country applicable to that bank states otherwise. Precedents cannot be created because, whilst
circumstances may be superficially the same on
the documentation level, each transaction (i.e.,
each credit or drawing thereunder) is separate
from each of its predecessors and is considered
independent.
4 In context with – new New Preliminary Consideration: Comments have been noted regarding correct
Preliminary Consideration As used in UCP 600 sub-article 14 (d), the text “when read in context with” means that the interpretation of the text “read in context with” –
requirements of the documentary credit, the content, structure and purpose of the document there appears to be some uncertainty in the
itself, and international standard banking practice need to be assessed, understood and be market.
taken into consideration in determining compliance of a document.
The wording is consistent with that stated in the
“Commentary on UCP 600”.
5 Ambiguity – add to Additional text at end of Preliminary Consideration v): The existing text already states that the issuing
Preliminary Consideration In the event that an issuing bank issues a credit or amendment that is ambiguous or conflicting bank should ensure that any credit or
v) in its terms and conditions, it bears the risk of such ambiguity or conflict. The same applies to a amendment it issues is not ambiguous or
confirming bank, if any, which confirms a credit which is ambiguous or conflicting in its terms conflicting in its terms and conditions; however,
and conditions.
 further clarification is to be considered, plus
extension to the confirming bank.

Ref GENERAL PRINCIPLES CHANGE RATIONALE

1 All documents – new Include reference to “all documents” in the opening paragraph of A19, and add new sub- Whilst ISBP 821 paragraph B1 (b) mentions that
General Principle in A19 paragraph (h): banks only examine a draft to the extent
“all documents” – all documents stipulated by the credit except drafts. A draft is an described in paragraphs B2-B17, this does not
unconditional order in writing and not a document for the purposes of examination of directly help when a credit includes a reference to
documents under a documentary credit subject to UCP 600. "all documents".
2 Without delay – new New General Principle - Without delay: Alignment with Technical Advisory Briefing No. 2 -
General Principle Reference in the UCP 600 to “without delay” means that the concerned bank must complete an Meaning of “without delay” in UCP 600.
action as soon as practicable for that activity and with due consideration to any given
circumstance(s).
3 Non-documentary New paragraph at the end of General Principle A26: Alignment with Technical Advisory Briefing No. 1 -
conditions - new General Issuing banks and applicants should ensure that any term or condition stated in a documentary Non-documentary conditions in Documentary
Principle in A26 credit is clearly linked to a stipulated document. Where a non-documentary condition is Credits subject to UCP 600.
incorporated into a documentary credit, banks and the beneficiary should pay attention to UCP
600 sub-articles 14 (h) and 14 (d).
4 Direct presentation - new New General Principle - Direct presentation of documents: Alignment with Technical Advisory Briefing No. 9 -
General Principle a. The obligation and undertaking of the issuing bank remain the same whether Direct presentation of documents to an Issuing
documents are presented via a nominated bank or directly to the issuing bank. In Bank under a documentary credit subject to UCP
both scenarios, the issuing bank must honour provided the stipulated documents 600.
have been presented and that they constitute a complying presentation.
b. In the interests of good practice it is strongly recommended that, in the event a
documentary credit is available with a named nominated bank and documents are
presented directly to the issuing bank, the issuing bank should contact the nominated
bank to inform them of the direct presentation (so that the nominated bank’s records
can be updated) and to enquire of the details of any presentation(s) that have been
made for which the issuing bank may be unaware.
c. For the purposes of this General Principle, "direct" presentation includes
presentation through a bank other than a nominated bank'.
5 Detailed - new General Add new sub-paragraph (i): The notion of “detailed” in front of a
Principle in A19 “detailed” – when used in the context of qualifying a document, for example, “detailed Packing document/certification e.g., detailed P/L or
List” or “detailed Weight List”, and unless otherwise defined in the credit, it has no meaning detailed weight certificate shall have no meaning
and is to be disregarded. and will be disregarded unless otherwise defined
in a credit.
6 Manually – update General Update General Principle A31 (b) to read: The word “manually” adds nothing to the context.
Principle A31 (b) and delete Copies of documents need not be signed, even when a credit states that all documents are to Clarification that where a credit requires a copy of
“manually” be manually signed. However, where the credit requires a photocopy or facsimile copy of an an original document and the original document
 original document and the original document is required to be signed, the copy should show is required to be signed, the copy should show
that the original document was signed. that the original document was signed.

Also updated to reflect that a copy will always be

a photocopy or facsimile copy. Scanned or re-
printed copies are equivalent to a photocopy.

Ref DRAFTS CHANGE RATIONALE

1 Use of drafts – new New opening paragraph – Recommendation: Alignment with the Guidance Paper “Use of Drafts
paragraph Ordinarily, a UCP 600 documentary credit need not require a draft to be presented together under Documentary Credits”.
with the stipulated documents. Accordingly:
a. It is recommended that the habit of requiring a draft for a documentary credit Whilst the ICC cannot mandate market practice, it
available at sight be curtailed, particularly sight drafts drawn on an issuing bank, can make recommendations. Accordingly, the
confirming bank, or a bank nominated to pay. conclusion from the Guidance Paper should be
b. UCP 600 article 2 allows for negotiation to occur under a documentary credit reflected in the ISBP.
available by negotiation with or without a presentation of a draft. It is recommended
that the habit of requiring a sight draft for a documentary credit available by
negotiation be reviewed and that negotiating banks be encouraged to rely, not on
negotiable instruments’ law, but instead on specific agreements with beneficiaries
evidencing negotiation and their respective recourse and other rights and remedies.
c. UCP 600 sub-article 12 (b) supports the prepayment of a deferred payment
undertaking. As such, it is recommended that banks issue usance documentary
credits available by deferred payment as an alternative to availability by acceptance
of a draft, unless there is specific commercial, regulatory or legal reason to create a
bankers’ acceptance.
2 Requirement for draft – New paragraph B1 c) under “Basic Requirement”: Alignment with ICC Opinion TA939rev.
new paragraph In the event that a documentary credit is issued using an authenticated SWIFT message, the
requirement for a draft, if needed under a documentary credit, should only appear in the
designated fields of the SWIFT message. If, however, a requirement for a draft is repeated in
more than one designated field and includes the same tenor and drawee, this will be treated as
a repetition of the details and is to be disregarded.
3 Endorsement of draft – Update paragraph B15 to read: The existing wording “if necessary” is far too
revise paragraph B15 A draft need not be endorsed, if necessary unless required by the credit. vague and is to be deleted. The emphasis should
be on whether or not endorsement is required by
the credit.

Ref INVOICES CHANGE RATIONALE

1 Title of invoice – new New paragraph C1 c) under “Title of an invoice”: Alignment with Technical Advisory Briefing No. 7 -
paragraph The terms “invoice” and “commercial invoice” are, for the purpose of documentary credits and Title of Invoice.
UCP 600, interchangeable. If a credit requires presentation of simply an “invoice”, UCP 600
 article 18 still applies. The crucial characteristic is that the content of an invoice must appear to
fulfil the function of the required document.
2 Free of charge – revise Update paragraph C13 to read: This clearly addresses the issue which was raised
paragraph C13 An invoice is not to indicate: by withdrawn ICC Opinion TA927rev2, and
a. over-shipment (except as provided in UCP 600 sub-article 30 (b)), or provides a workable and transparent approach to
b. goods, services or performance not called for in the credit. the issue.
Unless specifically allowed by the credit, any items which are stated to be free of charge are
not allowed. This includes additional quantities of goods, services or performance as required
by the credit or samples and advertising material.
3 Incoterms – update Update paragraph C9 to read: Alignment with Incoterms 2020.
paragraph C9 When a trade term is stated as part of the goods description in the credit, an invoice is to
indicate that trade term, and when the source of the trade term is stated, the same source is to
be indicated. For example, a trade term indicated in a credit as “CIF Singapore Incoterms 2020”
is not to be indicated on an invoice as “CIF Singapore” or “CIF Singapore Incoterms”. However,
when a trade term is stated in the credit as “CIF Singapore” or “CIF Singapore Incoterms”, it
may also be indicated on an invoice as “CIF Singapore Incoterms 2020” or any other revision.

Ref. MULTIMODAL TRANSPORT CHANGE RATIONALE

1 Update paragraph D7 to Update paragraph D7 to read: Greater emphasis that paragraphs E6 (a-d) and (h)
ensure alignment with When a credit requires shipment to commence from a port, i.e., when the first leg of the provide the parameters.
paragraphs E6 (b), (c) & (d) journey, as required by the credit, is by sea, a multimodal transport document is to indicate
that the goods have been shipped on board a named vessel at the port of loading stated in the
credit and paragraphs E6) (a-d) and (h) apply.
2 Main transport leg by air – National Committee comment: Feedback is sought on this issue – is it relevant or
revise section D Multimodal transports where the main transport leg is by air - it has been observed that there not? If so, which specific changes are required?
are documentary credits that, for example require the following transport route:
44E Port of loading/Airport of Departure: Any airport and/or Seaport in Europe Suggestion:
44F Port of discharge/Airport of destination: Any airport or seaport in Egypt Add a paragraph to section D covering the issue
44B Place of final destination/For transportation onto.../Place of delivery: [company name (i.e., when an AWB is presented and to be
XXXX] warehouse examined subject to article 19) – and making
references to the relevant paragraphs from
According to ISBP 821 paragraph D1 (c), UCP 600 article 19 is to be applied in the examination section H. If this is the case, what are the exact
of that document, and ISBP 821 section D would determine the applicable practice. text updates required, if any?

If an air waybill is presented, this may cause unexpected issues, as ISBP 821 section D does not Or, should it be stated that if the credit requires
reflect the air transport practice that is reflected in ISBP 821 section H. air transport document for the air transport mode
option, the indication of a place of final
destination / place of delivery in the credit shall
be disregarded and a transport document subject
to UCP 600 article 23 is deemed to be required.
3 Port of discharge – revise Alignment with ICC Opinion TA935rev2 Feedback is sought on this issue – is update
paragraph E8 (b) Does the content of this Opinion necessitate an update to paragraph E8 (b) or is the paragraph actually needed, or does paragraph E8 (b) already
already in alignment? align with TA935rev2?

Initial feedback, although not unanimous,

indicates that no update required.

If update is required, which specific changes are

necessary?

Ref. BILL OF LADING CHANGE RATIONALE

1 Paragraph D1 (c) also Determining the applicable transport article Feedback is sought on this issue – is it relevant or
applicable for Bills of Paragraph D1 (c) is also (perhaps primarily) relevant for a Bill of Lading? not? If so, which specific changes are required?
Lading
Refer MMTD ref 2 above.
2 Cities mentioned as Alignment with ICC Opinion TA937 Feedback is sought on this issue – is it relevant or
airports – applicability for ISBP paragraph H11 (Airports of departure and destination) - When a credit indicates a not?
Bills of Lading? geographical area or range of airports of departure or destination (for example, “Any Chinese
Airport” or “Shanghai, Beijing, Guangzhou airport”), an air transport document is to indicate If so, which exact updates are required?
the actual airport of departure or destination, which is to be within that geographical area or
range of airports. An air transport document need not indicate the geographical area.
3 Applicability of paragraph Expansion of existing text Feedback is sought on this issue – is it relevant or
D17 Consider clarification that when a credit requires a (multimodal) bill of lading consigned “to not? If so, which specific changes are required?
order” of a named entity, whether a bill of lading issued “to order” or to order of another
entity and then endorsed to the order of that entity stated in the credit is acceptable. If changes required, are they also relevant to
paragraphs E13 and G12?

Ref. NON-NEGOTIABLE SEA CHANGE RATIONALE

WAYBILL
1 Paragraph D1 (c) also Determining the applicable transport article Feedback is sought on this issue – is it relevant or
applicable for NNSWB Paragraph D1 (c) is also relevant for NNSWB? not?

If so, which specific changes are required?

2 Original NNSWB National Committee comment: Feedback is sought on this issue – is it relevant or
Many issues relating to the non-negotiable sea waybill are around originality, as it is common not? If so, which specific changes are required?
practice to only issue sea waybills as PDF documents. Expand paragraph F10 to cover more
acceptable scenarios without contradicting UCP 600 sub-article 21 (a) (iv). Suggestion:
To be added in order to reflect transport practice.
Perhaps with a definition / application similar to /
in in with sub-article 24 (b) (iii).
 The majority counter viewpoint is that this is
irrelevant in that UCP 600 credits require paper
documents. There are principles of originality,
which are to be followed. If the document,
however issued or transmitted to the shipper,
fulfils these principles, it is an original, if not, it is
not an original. There is no need to add anything
more to that, this principle is valid for ALL
documents.
3 Cities mentioned as Refer Bill of Lading Ref. 2 above Feedback is sought on this issue – is it relevant or
airports – applicability for Alignment with ICC Opinion TA937 not?
NNSWB?
If so, which specific changes are required?

Ref. AIR TRANSPORT CHANGE RATIONALE

1 Cities mentioned as Refer Bill of Lading Ref. 2 above Feedback is sought on this issue – is paragraph
airports – applicability for Alignment with ICC Opinion TA937 in respect of airports mentioned (only) as cities. H11 already sufficiently aligned?
Air Transport
If not, which specific changes are required?

Ref. ROAD, RAIL OR INLAND CHANGE RATIONALE

WATERWAY
1 Update to three sections, Should section J be split? Feedback is sought on this issue – is this
i.e. differentiate between For example, in recent times, virtually no actual practice exists in respect of Inland Waterway worthwhile or not?
road, rail and inland transport documents.
waterway If so, which specific changes are required?

Ref. CERTIFICATE OF ORIGIN CHANGE RATIONALE

1 New paragraph under National Committee comment: Feedback is sought on this issue – is it relevant or
“Basic requirement and ICC Opinion R816 / TA772 - appeared to be an intention of the issuer of the certificate to refer not? Market practice appears to indicate this is
fulfilling its function” to the information in the box titled "observations" as an indication of the origin of the goods. not a problem.
However, this box merely referred to the entity that had produced the goods. While the
country of the producer may be a criterion in establishing the origin of the goods, it does not If relevant, which specific changes are required?
necessarily equate to the country of origin.

Ref. PACKING LIST CHANGE RATIONALE

1 Add new paragraph under National Committee comment: Feedback is sought on these issues – are they
“Content of a packing list” Add a general statement mentioning that any indication relative to the goods relevant or not?
packaging/packing will fulfil the function of a packing list. For example, when a credit calls for
 goods to be packed in sacks/bags and the packing list notes the number of pallets versus the If so, which specific changes are required?
number of bags, this does not represent a conflict. Additionally, having a statement that goods
are shipped “in bulk” is sufficient. Consider adding 'or "loose" or "loose in container" or the
like'. Any review to include the question of containerisation, and consider circumstances
wherein a credit is silent regarding the way goods are to be packed.

Ref. DIGITAL ISSUES CHANGE RATIONALE

1 Format Digital issues not to be included in the revision. No current market practice exists for eUCP
Unlike ICC rules such as UCP/eUCP, the ISBP should be reactive not proactive. processes, therefore digital should not be
included in ISBP at this stage.
2 Electronic documents Digital issues not to be included in the revision. No current market practice exists for eUCP
Unlike ICC rules such as UCP/eUCP, the ISBP should be reactive not proactive. processes, therefore digital should not be
included in ISBP at this stage.
3 Email and attachments Digital issues not to be included in the revision. No current market practice exists for eUCP
Unlike ICC rules such as UCP/eUCP, the ISBP should be reactive not proactive. processes, therefore digital should not be
included in ISBP at this stage.
4 Presentation of paper Digital issues not to be included in the revision. No current market practice exists for eUCP
Unlike ICC rules such as UCP/eUCP, the ISBP should be reactive not proactive. processes, therefore digital should not be
included in ISBP at this stage.

Ref. NATIONAL COMMITTEE CHANGE RATIONALE

CONSIDERATION
1 Encourage and increase the National Committee comment: Feedback is sought on this issue – is it relevant or
usage of Multimodal When drafting UCP 600, the “Transport Document Covering at Least Two Different Modes of is it a marketing / adoption / training issue? If to
Transport Documents Transport” was placed as the first of the transport documents – to encourage the usage of this be included in ISBP, which specific changes are
(more flexible) transport document. Based on industry information, and the queries raised to required?
the ICC, it still appears as if the traditional “port-to-port” bill of lading is the dominant transport
document required under documentary credits. Strongly recommended that this is not an ISBP
issue, but one of education.
2 On board notations - ICC National Committee comment: Feedback is sought on this issue – is it relevant or
Guidance Paper, Consider if Sections D, E, F & G should be updated to reflect the practices in respect of on- not?
“Recommendations in board notations (and any other relevant issues) and include a relevant reference to the
respect of the Guidance Paper. Is this really an ISBP issue or should it be
requirements for an on- addressed elsewhere? ISBP would not be the
board notation”. optimal location. Initial majority agreement that
this is not relevant.

If relevant, which specific changes are required?

3 Numbering of a transport National Committee comment: Feedback is sought on this issue – is it relevant or
document not?
 It has been observed that some banks refuse presentations on the basis that the page with the
actual shipping information is numbered as “page 2”. Reasoning is that page 2 is generally the Market practice indicates that this should not be
page with the terms and conditions and considered as “page 1”. The refusal then (wrongly) necessary.
states that “page 1 is missing”
Suggested that a paragraph in each applicable section of ISBP address this issue. If relevant, which specific changes are required?
4 Add a general statement National Committee comment: Feedback is sought on this issue – is it relevant or
that a bank’s neglecting to Whilst not strictly an issue to be covered by the existing scope of ISBP 821 (i.e., examination of not? Is this actually an ISBP issue?
immediately add an documents), this should be addressed in some format. However, this is an issuing bank /
endorsement to a applicant issue. Initial majority feedback is that this is not
document such as an relevant.
insurance policy, transport Also, to consider whether any update should cover endorsements of transport documents and,
document, etc., payable to, maybe, insurance document (in more detail). If so, for transport documents, it should include If relevant, which specific changes are required?
or consigned to it, may what is becoming quite common - a CPBL that shows the shipper as ABC and the consignee
delay but cannot cause field as “To order” with no endorsement. Effectively, making it a bearer document. The
non- payment/non- document is then endorsed by DEF in favour of LMN. This would comply, certainly in law.
reimbursement under a
complying presentation.
5 Presentation indicating National Committee comment: Feedback is sought on this issue – is it relevant or
“Extend or Pay”: ICC Suggest inclusion in ISBP and alignment to the ISDGP. This was deliberated upon in the ISBP not?
Opinion R869 / TA841rev2 745 Opinions review in 2023 and, at that stage, considered not to be an ISBP issue under the
does not provide sufficient current scope. Strongly recommended not to include; it is more
guidance on this topic. A presentation, which includes a reference to extending a credit or paying the presentation, a Standby issue.
should include the expected new expiry date/period. As such, it must be examined for
compliance with the terms/conditions of the credit and, if non-compliant, refused in If relevant, which specific changes are required?
accordance with UCP 600 Article 16; or, if compliant, and the confirming bank and/or issuing
bank agree to an extension, such decision must be completed within the maximum days
allowed for the examination of a presentation.
Consider that this is primarily a standby credit issue which may not be relevant for UCP and
ISBP, as it rarely occurs under standby credits subject to UCP. Incorporation in ISBP may lead to
misunderstandings whether and to what extent it would apply to "commercial" credits.
6 Add a clause similar to National Committee comment: No ICC Opinion for UCP 600 and/or ISBP has ever
paragraph 143 (additional Whilst this is a very rare event under a documentary credit subject to UCP 600 and is more been raised on this topic. Feedback is sought – is
implications added by a suited to ISP98 and Standby Credits, the option could be considered for inclusion in ISBP. it relevant or not?
bank) in the ISDGP.
Strongly recommended not to include; it is more
a Standby issue.

If relevant, which specific changes are required?

7 Covering letter statements National Committee comment: Under the current mandate, this is not within
A presenting bank’s covering schedule date is not to be considered as the presentation/receipt scope. Feedback is sought on this issue – is it
date of the presenting bank. In the majority of cases, it is presumed that the presentation is relevant or not?
received prior to the covering schedule date. When a covering schedule is dated after the latest
permitted date of presentation and/or expiry date, any statement certifying that the terms and Strongly recommended not to include as it goes
conditions have been complied or that documents were presented within validity, etc., will be beyond ISBP principles.
sufficient evidence of presentation that the presentation occurred within the expiry date
and/or last date for presentation. Or, would it make more sense to cover this in a
future Technical Advisory Briefing together with
issue 8 below – document mailing?

If so, which specific changes are required?

8 Document mailing National Committee comment: Although the presentation of documents is not
There are a number of opinions on this topic. Potential to add guidance, e.g., “When silent, strictly within the current scope of ISBP 821, it
documents should be sent in one lot. Less than a full presentation is a discrepancy”; “Credits should be deliberated if such inclusion is
requiring two mailings: the nominated/presenting bank should send the first lot consisting of at warranted.
least one original of all of the required documents (including any sole original). The second lot
will consist of all remaining originals if any, and copies of the documents required by the If this type of issue is to be added, it may better
credit.” [reference ICC Opinion R415/TA501]; “When the beneficiary is forwarding documents be included in a section at the very end,
directly to the issuing bank, the issuing bank must receive the full presentation (both lots) recognising that it is an event after the
within the last date of presentation and/or expiry date of the Credit.” [reference ICC Opinion examination is concluded.
R787 / TA785rev].
Or, would it make more sense to cover this in a
future Technical Advisory Briefing – refer above,
issue 7 – covering letter statements?

Feedback is sought on this issue – is it relevant or

not?

If relevant, which specific changes are required?